Treasury warns foreign banks against helping Russia avoid sanctions

Referring to his message to foreign banks, he added: “You need to make sure that not only are you watching the flows in your financial institution, but you also need to help by reminding the companies you support that they, too, do not want they provide material support to Russian oligarchs or Russian companies as well.”

Banks and financial institutions around the world are struggling to stay compliant with waves of new sanctions against Russia.

Citigroup, the largest US bank in Russia with about 3,000 employees, was in “active dialogue” to sell its Russian consumer and commercial banking businesses, Jane Fraser, its chief executive, told Bloomberg this month.

Citigroup reduced its exposure to Russia to $7.9 billion in March from $9.8 billion at the end of last year, according to a filing. “This financial services rig is a very, very big deal,” Fraser said at a conference this month. She said she expected global capital flows to shatter as nations develop new financial systems to avoid relying too heavily on Western companies.

Foreign banks with US operations may find themselves caught between conflicting demands. In some cases, US sanctions required them to cut longtime customers. Those who resisted doing so learned how serious the authorities could be about tracking down offenders and hitting them with hefty fines.

In 2019, for example, British bank Standard Chartered paid $1.1 billion to settle cases brought by the Department of Justice, the Treasury, the New York state banking regulator and state prosecutors over transactions it carried out for Cuba, Syria, Iran and Sudan. in violation of the law. US sanctions. Two years earlier, Deutsche Bank paid $630 million after it was caught helping Russian investors infiltrate $10 billion into Western financial centers. International giants HSBC and BNP Paribas have also paid billions over the past 10 years to resolve cases of sanctions violations.

Lananh Nguyen contributed reports.

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